Coronavirus: If Europe fails, who will succeed?

Last week, Italy’s Matteo Salvini declared: ‘This is a den of snakes and jackals. First, we defeat the virus, then remember Europe. And, if necessary, we say goodbye.’

Salvini is out of government, for the moment. Unceremoniously dumped last year from his position as interior minister after forcing elections which he lost, the man who would be Il Duce is waiting to strike back.

He knows it won’t be long. With Italy on its knees, with its Covid-19 dead accounting for a third of the global total, a political and economic reckoning is around the corner.

It is likely to be ugly. Salvini and extremists like him will inevitably be the beneficiaries.

It had become received wisdom to say that all of Europe had learnt from Brexit.

No matter how rabid their anti-establishment messaging might be, none of the continent’s far-right or far-left groupings would go so far as to demand withdrawal from the European Union any more.

They had had ringside seats to the spectacle of four years of chaos in the UK and that was enough to bring them to their senses.

Coronavirus may have swung the argument back again. Increased hostility to the EU project may be one of the many far-reaching consequences.

Salvini had chosen his words carefully. He had seen the fury on social media, he had watched the YouTube videos of Italians sitting at home in front of their laptops, ceremoniously burning the EU flag while playing their own national anthem.

He clearly believes that such is Italy’s sense of betrayal at seemingly being left to cope with the pandemic on its own, public opinion is shifting towards exit.

Is this wishful thinking? Hubris? Disinformation controlled from Moscow and Beijing? Or is the European Union at the point of no return?

Over the past decade the EU has twice been close to rupture – over the Greek sovereign debt battle that culminated in 2010 and the refugee influx of 2015.

On both occasions, the unity of the bloc was frayed; on both occasions the Germans were blamed.

Now it’s more of a sense of member states going it alone. Where they are acting collectively, it is back to the North versus the South (and vice versa).

In the first weeks of the crisis, the institutions were cast to the side lines. Although health, like terrorism, is technically not within the EU’s purview, this was a crucial opportunity, when a coordinated strategy would have made a big difference practically and politically.

Instead the initial instinct of the key players, Germany and France, was to fend for themselves, imposing export bans on critical medical goods, re-nationalising supply chains and closing borders.

Others followed suit. On the 25th anniversary of border-free travel – one of the four fundamental freedoms – every EU country with the exception of Ireland had closed or put restrictions on its frontier.

Member states had previously suspended Schengen, but only briefly and not en masse.

This time it was universal, the worst possible symbol, even if unavoidable in the circumstances.

The biggest fault line – as is invariably the case – has been over money. In February, member states had failed to agree a new seven-year budget and how to plug the financial gap left by the UK.

Last week, when they met for an emergency video-conference to discuss Covid-19, EU leaders didn’t just fail to agree. They fell out spectacularly and in public.

Italy and Spain had called for all-European bonds, so-called ‘coronabonds’, to be issued to raise hundreds of billions through issuing debt shared across the 27.

The Dutch prime minister Mark Rutte led the charge of the Frugal North against the Profligate South.

No meant no, he said after the meeting broke up. ‘It would mean you would cross the line, the Rubicon, into a eurozone that is more of a transfer union.’

This had been the same argument proffered towards Greece a decade ago, pushing that country, and the Union, to the brink. This time the stakes are even higher. Portugal’s prime minister, Antonio Costa, shot back: ‘This type of response is completely ignorant, and this recurring pettiness completely undermines what makes up the spirit of the European Union,’ he said.

The usually unflappable president of the European Central Bank, Christine Lagarde, had earlier suggested it was not the bank’s job to help Italy.

Her technical but tone-deaf argument – it was not the bank’s role to ‘close the spreads’ between 10-year German and Italian bonds – led to the largest daily increase on record on yields for Italian debt.

Meanwhile, the president of the European Commission, Ursula von der Leyen, rebuked member states for looking out for themselves. ‘When Europe really needed to prove that this is not only a fair-weather union, too many initially refused to share their umbrella.’

Europe, she said, was now stepping up.

A series of measures, previously unthinkable, have been introduced: strict anti-state aid rules have been dropped. The ECB has begun a huge EU-wide 750 billion euro bond-buying plan. Austerity has gone out of the window.

The next days and weeks will see EU leaders, their ministers and officials holding ever more frequent conference calls to chart a way out of the mire, and to find better means of coordinating member states’ responses.

What credibility will the EU have when it is all over? What pulling power will it be able to exercise?

It has been in the margins not just of the logistical and financial response, but also the politics.

All countries have introduced emergency measures, forcing populations to stay indoors, requisitioning key assets, closing borders and deploying new technologies to track movements.

None has gone as far as the perpetual outlier, Hungary, in exploiting the crisis to clamp down yet further on civil liberties.

Prime minister Viktor Orban, who takes pleasure in infuriating his critics, presented his draconian Coronavirus Bill to parliament in spite of protests from the EU and Council of Europe.

He has spent years defying Brussels, in the knowledge that nothing he does earns more than rhetorical criticism.

All the while, Vladimir Putin and Xi Jinping are enjoying the EU’s travails.

Russia is in the early stage of the corona curve and has its own problems. But over the past few years it has spared no effort in its attempts to undermine the EU, in supporting extremist parties and mounting a huge disinformation campaign.

China’s approach has been more strategic and long-term. Now that it is re-emerging from the worst of the pandemic, it is turning the tables, seeking to peel off countries like Italy and Hungary by providing medical and financial aid.

This is a ‘global battle of narratives’, declared the EU’s foreign policy chief Josep Borrell, using strikingly undiplomatic language. China’s ‘politics of generosity’, he said, was part of an overarching struggle for influence. ‘Armed with the facts, we need to defend Europe against its detractors’.

That led to a five-page pamphlet, setting out all the work the EU is doing to combat the virus. It will take far more than that for the EU to wrest back credibility, among its members and further afield. Corona will leave not just families, communities and regions devastated.

A new army of unemployed, impoverished and disillusioned will provide rich pickings for the populists.

Economic and social reconstruction akin to the Marshall Plan will be required, for Italy, Spain, indeed for all member states.

Does the EU as a project, as a value proposition, have what it takes to deliver that? The first phase of its response does not bode well, but there is still a chance. This will be a very long haul.